Apple
APPLE INC (Form: 8-K, Received: 04/20/2010 16:31:09)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

April 20, 2010

Date of Report (date of earliest event reported)

 

 

APPLE INC.

(Exact name of Registrant as specified in its charter)

 

California   000-10030   94-2404110

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

(408) 996-1010

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On April 20, 2010, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 27, 2010 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

The following exhibits are furnished herewith:

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. on April 20, 2010.
99.2    Data sheet issued by Apple Inc. on April 20, 2010.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    APPLE INC.
Date: April 20, 2010     By:   /s/ Peter Oppenheimer
       

Peter Oppenheimer

Senior Vice President,

Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. on April 20, 2010.
99.2    Data sheet issued by Apple Inc. on April 20, 2010.

Exhibit 99.1

Apple Reports Second Quarter Results

Record March Quarter Revenue and Profit

iPhone Sales More Than Double

CUPERTINO, California—April 20, 2010—Apple ® today announced financial results for its fiscal 2010 second quarter ended March 27, 2010. The Company posted revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share. These results compare to revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent, up from 39.9 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

Apple sold 2.94 million Macintosh ® computers during the quarter, representing a 33 percent unit increase over the year-ago quarter. The Company sold 8.75 million iPhones in the quarter, representing 131 percent unit growth over the year-ago quarter. Apple sold 10.89 million iPods during the quarter, representing a one percent unit decline from the year-ago quarter.

“We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent,” said Steve Jobs, Apple’s CEO. “We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.”

“Looking ahead to the third fiscal quarter of 2010, we expect revenue in the range of about $13.0 billion to $13.4 billion and we expect diluted earnings per share in the range of about $2.28 to $2.39,” said Peter Oppenheimer, Apple’s CFO.

Apple will provide live streaming of its Q2 2010 financial results conference call beginning at 2:00 p.m. PDT on April 20, 2010 at www.apple.com/quicktime/qtv/earningsq210/ . This webcast will also be available for replay for approximately two weeks thereafter.


This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company’s reliance on the availability of third-party digital content and applications; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the Company’s reliance on sole service providers for iPhone ® in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K, as amended, for the fiscal year ended September 26, 2009, its Form 10-Q for the quarter ended December 26, 2009, and its Form 10-Q for the quarter ended March 27, 2010 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.


Apple ignited the personal computer revolution with the Apple II, then reinvented the personal computer with the Macintosh. Apple continues to lead the industry with its award-winning computers, OS X operating system, and iLife, iWork and professional applications. Apple leads the digital music revolution with its iPods and iTunes online store, has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

Press Contact:

Steve Dowling

Apple

dowling@apple.com

(408) 974-1896

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and iPhone are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands and per share amounts)

 

     Three Months Ended    Six Months Ended
     March 27,
2010
   March 28,
2009
   March 27,
2010
   March 28,
2009

Net sales

   $ 13,499    $ 9,084    $ 29,182    $ 20,964

Cost of sales (1)

     7,874        5,457      17,146      12,830
                           

Gross margin

     5,625      3,627      12,036      8,134
                           

Operating expenses:

           

Research and development (1)

     426      319      824      634

Selling, general and administrative (1)

     1,220      985      2,508      2,076
                           

Total operating expenses

     1,646      1,304      3,332      2,710
                           

Operating income

     3,979      2,323      8,704      5,424

Other income and expense

     50      63      83      221
                           

Income before provision for income taxes

     4,029      2,386      8,787      5,645

Provision for income taxes

     955      766      2,335      1,770
                           

Net income

   $ 3,074    $ 1,620    $ 6,452    $ 3,875
                           

Earnings per common share:

           

Basic

   $ 3.39    $ 1.82    $ 7.12    $ 4.35

Diluted

   $ 3.33    $ 1.79    $ 7.00    $ 4.29

Shares used in computing earnings per share:

           

Basic

     907,548      891,180      905,545      890,161

Diluted

     922,878      902,993      921,331      902,243
(1) Includes stock-based compensation expense as follows:            

Cost of sales

   $ 37    $ 29    $ 74    $ 57

Research and development

   $ 86    $ 67    $ 160    $ 127

Selling, general and administrative

   $ 108    $ 85    $ 202    $ 167


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

 

     March 27,
2010
   September 26,
2009
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 10,018    $ 5,263

Short-term marketable securities

     13,137      18,201

Accounts receivable, less allowances of $57 and $52, respectively

     2,886      3,361

Inventories

     638      455

Deferred tax assets

     1,142      1,135

Other current assets

     4,515      3,140
             

Total current assets

           32,336            31,555

Long-term marketable securities

     18,549      10,528

Property, plant and equipment, net

     3,504      2,954

Goodwill

     480      206

Acquired intangible assets, net

     263      247

Other assets

     1,925      2,011
             

Total assets

   $ 57,057    $ 47,501
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 5,666    $ 5,601

Accrued expenses

     4,021      3,852

Deferred revenue

     2,542      2,053
             

Total current liabilities

     12,229      11,506

Deferred revenue – non-current

     941      853

Other non-current liabilities

     4,539      3,502
             

Total liabilities

     17,709      15,861
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 909,635,811 and 899,805,500 shares issued and outstanding, respectively

     9,553      8,210

Retained earnings

     29,670      23,353

Accumulated other comprehensive income

     125      77
             

Total shareholders’ equity

     39,348      31,640
             

Total liabilities and shareholders’ equity

   $ 57,057    $ 47,501
             


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     Six Months Ended  
     March 27,
2010
    March 28,
2009
 

Cash and cash equivalents, beginning of the period

   $ 5,263      $ 11,875   
                

Operating activities:

    

Net income

     6,452        3,875   

Adjustments to reconcile net income to cash generated by operating activities:

    

Depreciation, amortization and accretion

     425        349   

Stock-based compensation expense

     436        351   

Deferred income tax expense

     893        570   

Loss on disposition of property, plant and equipment

     9        8   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     482        490   

Inventories

     (183     197   

Other current assets

     (824     1,234   

Other assets

     149        (361

Accounts payable

     (18     (1,527

Deferred revenue

     577        128   

Other liabilities

     (287     (535
                

Cash generated by operating activities

     8,111        4,779   
                

Investing activities:

    

Purchases of marketable securities

     (25,061     (23,483

Proceeds from maturities of marketable securities

     13,331        6,280   

Proceeds from sales of marketable securities

     8,686        5,457   

Purchases of other long-term investments

     (9     (54

Payments made in connection with business acquisitions, net of cash acquired

     (325     —     

Payment for acquisition of property, plant and equipment

     (650     (439

Payment for acquisition of intangible assets

     (32     (30

Other

     19        (55
                

Cash used in investing activities

     (4,041     (12,324
                

Financing activities:

    

Proceeds from issuance of common stock

     534        122   

Excess tax benefits from stock-based compensation

     413        47   

Cash used to net share settle equity awards

     (262     (33
                

Cash generated by financing activities

     685        136   
                

Increase/(decrease) in cash and cash equivalents

     4,755        (7,409
                

Cash and cash equivalents, end of the period

   $ 10,018      $ 4,466   
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 2,144      $ 1,828   

Exhibit 99.2

Apple Inc.

Q2 2010 Unaudited Summary Data

 

     Q1 2010     Q2 2009     Q2 2010     Sequential Change    Year/Year Change
     CPU
Units K
   Revenue
$M
    CPU
Units K
   Revenue
$M
    CPU
Units K
   Revenue
$M
    CPU Units    Revenue    CPU Units    Revenue

Operating Segments

                          

Americas

   1,187    $ 6,092       809    $ 3,970       971    $ 4,993       - 18%    - 18%    20%    26%

Europe

   1,068      5,024      658      2,485      899      4,050      - 16%    - 19%    37%    63%

Japan

   105      783      109      587      129      887      23%    13%    18%    51%

Asia Pacific

   313      1,813      202      665      338      1,886      8%    4%    67%    184%

Retail

   689      1,971      438      1,377      606      1,683      - 12%    - 15%    38%    22%
                                                  

Total Operating Segments

   3,362    $ 15,683      2,216    $ 9,084      2,943    $ 13,499      - 12%    - 14%    33%    49%
                                                  
                          
     Units K    Revenue
$M
    Units K    Revenue
$M
    Units K    Revenue
$M
    Sequential Change    Year/Year Change
                    Units    Revenue    Units    Revenue

Product Summary

                          

Desktops (1)

   1,234    $ 1,692      818    $ 1,056      1,147    $ 1,532      - 7%    - 9%    40%    45%

Portables (2)

   2,128      2,758      1,398      1,904      1,796      2,228      - 16%    - 19%    28%    17%
                                                  

Subtotal CPUs

   3,362      4,450      2,216      2,960      2,943      3,760      - 12%    - 16%    33%    27%

iPod

   20,970      3,391      11,013      1,665      10,885      1,861      - 48%    - 45%    - 1%    12%

Other Music Related Products and Services (3)

        1,164           1,049           1,327         14%       27%

iPhone and Related Products and Services (4)

   8,737      5,578      3,793        2,427      8,752      5,445      0%    - 2%    131%    124%

Peripherals and Other Hardware

        469           357           472         1%       32%

Software, Service and Other Sales

        631           626           634         0%       1%
                                            

Total Apple

      $ 15,683         $ 9,084         $ 13,499         - 14%       49%
                                            

 

(1) Includes iMac, Mac mini, Mac Pro and Xserve product lines.

 

(2) Includes MacBook, MacBook Air and MacBook Pro product lines.

 

(3) Consists of iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.

 

(4) Units consist of iPhone handset sales; Revenue is derived from handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories.

K = Units in thousands

$M = Amounts in millions